A proper estate plan can individuals distribute their personal property and assets to the parties of their choosing. There are a few different elements that an estate plan may have, depending upon what the estate includes.
In some cases, a testamentary trust may be quite beneficial. This is a trust that is set up to come into being after a person’s death through the terms of a person’s will. For those considering this type of trust, there are a few important factors to consider.
A testamentary trust allows individuals to make specific designations of their estate property after their death. They may leave specific assets to certain people or entities, including charities and other organizations. Estate holders may also specify when to disperse the asset, whether it be on a certain day, after a specific event or in increments. The trusts generally expire, so the trust creator must determine the date to terminate the trust as well.
Trustees handle the distribution of trusts. Therefore, it is important that people choose trustees they can trust to respect their wishes and distribute the trust properly. It is important that the trustee meet the set requirements of the state as well. Otherwise, the court could find the trustee to be unfit and make a court-ordered designation.
Testamentary trusts could be helpful in a range of situations. Individuals hold a great deal of power in what they could design such a trust to do. However, they must be mindful to ensure that the various aspects of the trust design and designation would comply with the state’s trusts and estates laws.
These are a few of the key factors of a testamentary trust, and there are other elements to consider. Those thinking about having such a trust should take time to evaluate the options and their benefits to determine the best choice. It may also be beneficial to consult with a knowledgeable attorney.